RBI’s fourth bimonthly money policy for FY22 had little surprise. Interest rates were left unchanged, but the central bank’s liquidity moves suggested a clear move towards normalisation of the ultra-loose monetary policy adopted to tackle the Covid-19 crisis. Bhaskar Dutta of ETMarkets caught up with Anubhuti Sahay, Standard Chartered Bank’s Head of Economic Research, South Asia, to decode the policy statement. Listen in:
Q1: Let’s start with your view on interest rates after the policy. The Governor said that the 14-day variable rate reverse repos may be complemented with 28-day reverse repos. What are your views?
Q2: Is today’s policy a precursor to normalization?
Q3: The Governor today said that asset price bubbles and stock market bubbles cannot dictate monetary policy. Is there a risk of falling behind the curve if inflation outturns were to be unfavorable?
Q4: What is your estimate of when interest rates will be hiked?
This is Bhaskar Dutta. . . Thank you ma’am for a very intriguing conversation. That’s all in this special podcast. Do keep checking this space for more interesting content and take time out to follow our market podcasts twice every day. Stay safe and Happy Weekend!